Remuneration - powers of managing director, Business Law and Ethics

Remuneration:

            Article 108 provides that "a managing director shall receive such remuneration (whether by way of salary plus commission or may participation in earnings, or partly in one condition and partly in another) as the directors may determine". Here it was explained in Craven-Ellis v Cannons Ltd that, unless the articles provide otherwise, a managing director would be entitled to remuneration payable on a quantum meruit basis in respect of services rendered to the company, in those cases whether the directors had not fixed his remuneration at the time of his appointment. No such payment would however be made if the articles, like Article 108, contain specific provisions pertaining to the payment of remuneration. This is illustrated by Re Richmond Gate Property Co Ltd in that it was held that the phrase "as the directors may determine" meant that the managing director would be entitled to no remuneration unless and until the directors actually decided it. A payment on a quantum meruit would be inconsistent with the express provisions of the articles regarding payment of remuneration.

Posted Date: 1/12/2013 5:06:17 AM | Location : United States







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